Release:
Tax Rebate
Thursday,
August 9, 2001 04:13 PM
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NEWS FROM THE LIBERTARIAN PARTY
2600 Virginia Avenue, NW, Suite 100
Washington DC 20037
World Wide Web: http://www.LP.org
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For release: August 9, 2001
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For additional information:
George Getz, Press Secretary
Phone: (202) 333-0008 Ext. 222
E-Mail: pressreleases@hq.LP.org
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Your income tax "rebate"
check: Will it
leave you owing more money in 2002?
WASHINGTON, DC -- Here's a shocker:
The income tax rebate checks now arriving in Americans' mailboxes could mean
you'll get a smaller income tax refund than you expected next year -- or that
you might actually have to pay $300 or $600 more in taxes.
That's because the check is not a
rebate on taxes you paid last year, but an "advance rebate" on the
taxes you are paying this year, the Libertarian Party noted today.
So, if you're due a refund when you
file your tax forms in early 2002, it will be $300 per person lower than it
otherwise would have been. And if you are unlucky enough to owe taxes, your
bill could be up to $300 per person higher.
Surprised?
You're not the only one, said
Libertarian Party National Director Steve Dasbach: Millions of Americans
apparently don't understand that President George W. Bush and the Republican
Congress are playing a "rebate and switch game" with the recent tax
cuts.
"When it comes to the tax
rebate, one government hand giveth, and one government hand taketh
away," he said. "On one hand, tax rates have been slightly lowered
and Americans are getting refund checks. On the other hand, the tax rates on
next year's 1040 form won't be any lower and the refund you're getting now is
coming out of your refund next year.
"It's a classic rebate and
switch. The rebate check is in the mail, but that rebate means you'll get
less money -- or actually have to pay more money -- next year."
Confused? It does take some
explanation, said Dasbach.
The tax relief bill passed by
Congress earlier this year lowered most tax rates for working Americans --
reducing, for example, the 15% tax rate for low-income couples to 10%, and
the top tax rate of 39.6% to 35%. The first phase of the reductions took
effect this year.
To give "immediate tax
relief" to Americans, Congress and the White House ordered the IRS to
mail checks for $300 to working individuals, and $600 to working couples.
However, that rebate is in lieu of
lowering the actual tax rates this year. When you get the 1040 form for 2001
early next year, it will still have the old, higher tax rates.
That's because you have already
received your advance refund -- and if you filled out your 1040 form using
the new, lower taxes rates, you would then get the lower-rate tax savings a
second time.
So, if you end up being due a refund
for your 2001 taxes, it will be $300 lower than it would have been, since the
government has already sent you $300 of your refund this year.
And if you end up owing money for
your 2001 taxes, you will owe $300 more than you would have, since the
government sent you a $300 refund for which you didn't qualify. Or a married
couple could owe $600 more.
What kind of "tax cut"
could leave people owing more money to the government?
A Republican and Democratic tax cut,
said Dasbach.
"Don't get us wrong:
Libertarians support almost any proposal that allows Americans to keep more
of their own money," he said. "But a better tax cut would slash
rates across the board, permanently, simply, dramatically -- and without the
rebate and switch games being played by Republicans and Democrats. That's the
kind of tax cuts Libertarians support.
"Keep that in mind if you have
to write a check for $300 next year -- to pay for the so-called $300 rebate
the politicians sent you this year."
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The Libertarian Party
http://www.lp.org/
2600 Virginia Ave. NW, Suite 100
voice: 202-333-0008
Washington DC 20037 fax: 202-333-0072
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